5 Employment Laws You May Not Know You’re Violating

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As an employer, you may feel confident your company policies are in full compliance with employment laws, but the truth is many employers violate labor laws on a regular basis, whether they know it or not.

Alison Green, author of the popular Ask a Manager blog, discusses five of the most common labor laws that employers break in a recent article for US News & World Report. Keep reading to learn more – and hopefully you won’t recognize any of these practices within your own company.

1. Treating non-exempt employees as exempt from overtime pay.

As an employer, you don’t get to decide which of your employees are eligible for overtime pay. It depends on the type of work that they do. According to the federal government, all jobs fall into one of two categories: exempt or non-exempt. If an employee’s job does not fall within one of the exemptions in the law, the job is non-exempt and you must pay them overtime for all hours worked beyond 40 in any given week.

The exempt category pertains to employees who perform relatively high-level professional work, including outside sales employees and a few other narrowly defined categories. Unfortunately many employers incorrectly categorize employees as exempt when they don’t actually meet the government’s criteria, and thus avoid paying overtime to people who legally should be earning it.

2. Asking or allowing employees to work “off the clock.”

Non-exempt employees must be paid for all non-de minimis time they work, including tasks they might do outside of their normal working hours, such as answering emails or taking calls from home at night or on weekends. The law says you are required to pay them for that time, even if the work was not required, but simply allowed.

To avoid breaking this law:

Establish clear, written work-time policies

Closely monitor the hours your employees work

Train all employees, managers and supervisors that there cannot be off the clock work for non-exempt employees

3. Not permitting employees to discuss wages among themselves.

According to the National Labor Relations Act, you can’t keep non-supervisory employees from discussing their salaries with each other. The reason being, if they can’t uncover potential payroll injustices, then they aren’t able to effectively organize or unionize. ​

Despite the law, you’d be shocked by how many employers have policies against discussing wages anyway – so many that most people think these policies are normal and have no idea that they violate the law.

4. Disciplining employees for complaining about work on social media.

The National Labor Relations Act protects non-supervisory employees’ ability to discuss wages and working conditions with each other, whether in a private or public forum. The National Labor Relations Board has ruled repeatedly that employers’ attempts to control or limit what employees post on social media often violate the employees’ rights to engage in “protected concerted activity,” and that employees must be allowed to band together to try to improve their employment conditions, even if all they wish to do is to complain as a group.

That said, the NLRB does permit employers to prohibit maliciously false statements about the company, harassment, bullying, discrimination or retaliation.

5. Hiring independent contractors but treating them like employees.

If you control when, where and how a person works, the government claims that they must be treated like an employee and therefore you must pay their payroll taxes and offer them the same benefits you offer all employees. However, many employers continue to hire independent contractors and treat them like employees – in every way but pay – despite recent crackdowns by the government.

What happens if you misclassify workers? The risks are considerable, as you may be subject to fines and back taxes on both the federal and state levels. Depending on the level of culpability, fines may total as much as 100 percent of the employment tax due.

Regulations that govern classifying workers contain many gray areas. A best practice for mitigating this risk is to partner with a tax professional – either on-staff or contracted – who stays up to date on compliance issues regarding worker classification.

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